INTERVIEW-Virgin's Branson says airlines want CO2 targets

By John Acher

COPENHAGEN, Dec 17 (Reuters) - The airline industry wants emissions reduction targets rather than taxes and should work to switch to clean fuels by 2020, Virgin Group founder Richard Branson said in an interview.

Aviation and shipping are seen as candidates to be subject to new regulations, such as emissions caps or duties on fuel consumption, if the world reaches a new global climate deal. Branson, founder of the Virgin Group which includes Virgin Atlantic airline, said in an interview late on Wednesday that airlines would do their part if leaders agreed a climate pact at Copenhagen talks culminating on Friday.

"The airline industry wants to see targets set on Friday," Branson said. "I think the shipping industry wants targets set on Friday, I think the IT industry wants targets set on Friday so that we know where we stand and we can get on with it and make sure this world is back on track again."

"If the governments do not set those targets, then the industries need to get together and set the targets themselves, making sure that they are strong enough to keep global warming below 2 degrees (above pre-industrial levels)," he said.

Many shipping executives expect some form of tax on bunker fuels consumption in the wake of a climate deal -- rules that would come from the International Maritime Organisation (IMO).

But Branson said reduction targets would be better.

"The problem with a tax is where does the money go? And if you strip money from the airlines, then they will have less to invest in new planes and new technology," he said.

The global economic downturn, accompanied by a plunge in travel, has pushed many airlines to the brink.

Failure to meet targets would result in penalties, and the money from fines could be spent to develop new technology or to save rainforests, Branson said.

"But in the meantime targets should be set, and I think the airline industry should be capable of developing clean fuels. Virgin puts its profits from our airline industry into developing clean fuels."

CLEAN FUELS BY 2020

The International Air Transport Association (IATA), has said aviation aims to improve fuel efficiency by 1.5 percent per year to 2020, stabilise carbon emissions from 2020 and cut carbon emissions by 50 percent by 2050 from 2005 levels.

IATA has said that it expects biofuels, which it expects to be certified for use in jets by 2011, could have a big impact.

Branson, whose Virgin empire ranges from music and entertainment to mobile telecommunications and commercial space travel, said that the whole airline industry should be running on clean fuels by 2020, though Virgin aimed to do it by 2015.

"Once we've got targets set, we'll go out and try to meet them, and I think we will be able to meet them without it costing the industry a lot of money," Branson said.

Branson said that in addition to the environmental impact, new fuels would reduce dependence on oil producing countries.

"At the moment, you only have OPEC to buy your fuel from. That's it, there's no competitor," he said. "If you develop a clean fuel made of algae, or butanol, then there is a clean alternative."

New lighter-weight aircraft will be part of the solution.

"Airbus and Boeing needs to be building new carbon-composite planes, not just parts," Branson said.

Boeing's new 787 Dreamliner is made primarily of carbon-based plastics and titanium.

"We are pushing them to go all-composite," Branson said.

"An all-composite plane is incredibly light, incredibly strong, incredibly efficient," he said.